Ethereum takes a 6% dip after reports concerning regulatory pressure circulate.
The last few weeks have been fantastic for Ethereum with the price nearing a 713.24 breakthrough. However, the Ethereum community was a little disheartened as the price fell by 6% after a report by Wall Street Journal informed the public that the second largest cryptocurrency is under scrutiny by regulators.
The Scoop From Wall Street Journal
The regulators of securities and the United States commodities regulatory bodies are debating on whether or not cryptocurrencies should be regulated like stocks. This will be the first time cryptocurrencies are attracting this kind of attention from the regulators this year.
Apparently, some regulators consider Ethereum’s creation as illegal. The news brought Ether’s price down by 6% with the cryptocurrency selling at $652 after the announcement according to CoinMarketCap.
The regulators believe that founders of virtual currencies apart from Bitcoin have too much power over the value and may be able to influence the price.
While the Commodity Futures Trading Commission claims that cryptocurrencies are commodities, the SEC alleges cryptocurrencies are securities. In March, the SEC announced that it was making plans to apply the same laws for securities to every other digital asset including cryptocurrencies.
According to the reports by Wall Street Journal, the matter will be discussed by senior CFTC and SEC officials on Monday.
In July 2014, the Ethereum foundation generated over 31,000 Bitcoin which as the time was worth $18.3 million. It sold 60 million Ether at the time. The deal looked like a security since investors expected that the launch would increase the value of assets.
A company called Ethereum created ether. Ethereum developed a platform for applications designed on the blockchain platform. The blockchain technology is the same technology behind Bitcoin. The digital token Ether, was launched in the companies first attempt to generate funds for the platform.
Currently, there is an enterprise known as the Ethereum Alliance comprising of J.P Morgan and Microsoft. The enterprise is actively researching new ways to use the Ethereum blockchain.